Pharmaceutical Commerce - March/April 2013 - (Page 6)

Op-Ed Why community oncology matters Oncology is the market for today’s pipeline products. Here’s why the community setting needs to be preserved as a primary site of care to administer those products By Barry Fortner, ION Solutions, AmerisourceBergen Specialty Group I have a friend who is a two-time cancer survivor—breast cancer in 2001 and pancreatic cancer in 2010. Both times she had the option of seeking care at an academic medical center or another, more renowned facility. Both times she chose her local community practice to provide a successful course of action. But that’s not why I believe in community oncology. At ION Solutions, we had a physician member who served patients in rural Montana. Every month, he would crisscross the state in a small plane (at his own expense) to make sure cancer patients had access to care near their homes. But that’s also not why I believe in community oncology. I believe in community oncology because anecdotes and analysis both show definitively that patients receive quality care at appropriate costs in cancer clinics located right in their neighborhoods. Community oncology delivers greater access, high quality and lower costs when compared to other sites of care. So why are community practices under fire? Why do there continue to be discussions around Medicare cuts that would reduce reimbursement in the community setting from ASP+6% to ASP+4%—effectively cutting physician reimbursements on drug costs by one-third? Haven’t community oncologists done enough to demonstrate their value? Let’s look at the metrics. When it comes to patient access, community oncology rules the day. More than 70% of patients nationally receive cancer care in community practices. The wait time between diagnosis and initial chemotherapy visit is 7% shorter at community practices. And this applies in both urban and rural areas. When it comes to quality of care, community oncology shows compliance with national, evidence-based guidelines across many common cancer types: from breast and colon to prostate and melanoma. Managing the specialty pharmacy channel’s evolution By Adam J. Fein, Ph.D. Given the evolving dynamics of specialty pharmaceutical dispensing, manufacturers will need to master the evolving retail channel. Compared with traditional products, specialty drugs require different contracts, moresophisticated commercial strategies, and a modern approach to trade management. A majority of the specialty drugs dispensed to patients are sold via a specialty pharmacy. However, any licensed pharmacy is allowed to dispense a specialty drug as long as the product can be purchased from a manufacturer or through an authorized wholesale distribution channel. A pharmacy can designate itself a “specialty pharmacy” if its business focus is self-administered specialty pharmaceuticals that are covered under a patient’s pharmacy insurance benefit. Consequently, numerous pharmacies with specialty drug capabilities compete vigorously to dispense these expensive therapies. Pharmacies dispensing specialty drugs are operated by such organizations as retail pharmacy chains, health plans, pharmaceutical wholesalers, physician practices, pharmacy benefit managers, and independent specialty pharmacies. Despite this diversity, market share remains highly concentrated. Three companies—Express Scripts, CVS Caremark, and Walgreens—account for two-thirds of revenues from pharmacy-dispensed specialty drugs. Most pharmaceutical manufacturers limit the number of specialty pharmacies authorized to dispense their specialty products. Retail pharmacies currently have access to products that can be purchased from an authorized When it comes to the cost of care, we see significant cost savings in multiple scenarios. One report stated that patients managed in an office setting are 24% less costly than hospital-managed patients for common cancer types, and that office-managed patients had fewer hospitalizations during chemotherapy. Another report showed the mean chemotherapy costs across all regimens for breast, lung and colorectal cancers were significantly lower for office-managed patients. All of this is not to disparage hospitalbased care or academic medical center-based care. Quality care can be found across all types of provider organizations. What I’m saying is that patients deserve a choice in where they receive care, and physicians deserve a choice in where they practice care. With proposed reimbursement and cost-cutting measures, that choice is being threatened. More than 700 community practices merged with other sites of care or closed altogether in the last few years. Patients are having to travel farther and wait longer to receive treatment—a troubling trend for the manufacturers who make the cancer drugs, the providers who administer them and most of all, the patients who receive them. These trends will accelerate unless legislators and policymakers recognize how important community practices are in the care delivery process. wholesale distribution channel. Unlike specialty products in a limited specialty pharmacy network, these products are in open distribution and can be dispensed by any licensed pharmacy. The projected growth in specialty drug dispensing is encouraging pharmacies to focus on these open distribution products, increasing competition for specialty pharmacy services. To compete for the business of dispensing specialty drugs with limited networks, retail pharmacies are using six basic approaches to develop the requisite services and technology infrastructure: Build internal specialty pharmacy services. Kinney Drugs, the second-largest regional drugstore chain, recently launched Noble Health Associates, LLC to dispense specialty medications by mail. For example, regional chain Kerr Drug launched a subsidiary focused on specialty pharmacy and clinical services. What’s more, grocery chain Schnucks has opened five specialty-focused pharmacies within Schnucks stores and as stand-alone facilities within medical clinics and hospitals. Create specialty-focused retail locations. The larger drugstore chains have designated certain stores for specialty products. CVS operates 31 CarePlus retail pharmacies, which focus on dispensing specialty medications. Walgreens has 700 HIV-specialized pharmacies that offer a broad range of patient services and dispense such HIV medications as Atripla, Truvada, and Norvir. HIV drugs constitute 10.5% of total continued on page 36 ABOUT THE AUTHOR Dr. Fein is president of Pembroke Consulting, Inc., and CEO of Drug Channels Institute. This article is adapted from his new report, the 2012–13 Economic Report on Retail, Mail, and Specialty Pharmacies, http://drugchannelsinstitute.com/ products/industry_report/pharmacy/. 6 Visit our website at www.PharmaceuticalCommerce.com March | April 2013 To help community oncologists band together and present an unmistakably clear message of quality and value to payers, patients and government agencies, we are working with our customers on a campaign called Community Counts (www. ourcommunitycounts.org). This physicianled movement educates and advocates about what community practices contribute to both the quality and economics of oncology care. Practices can access validated data that speaks to their cost-efficiency and positive patient outcomes. They can then take this data personally to their legislators or use an online tool to contact those lawmakers directly. The goal is to give practices a single, unified and loud voice to communicate the reality of what they face and why it matters for the community setting to be preserved in cancer care—why it matters for the providers, for payers, for manufacturers and most of all, for patients. ABOUT THE AUTHOR Dr. Barry Fortner is senior vice president of operations for ION Solutions, part of AmerisourceBergen Specialty Group, where he works to develop relationship models that benefit the provider, the payer and the patient. Dr. Fortner holds a Ph.D. in clinical psychology from the University of Memphis. Focusing pharma marketing on ‘headroom’ In the race to improve product performance, not enough attention is paid to ‘who’s actually going to switch?’ By Greg Rotz and Valentin Recker, Booz & Company In today’s era of constrained healthcare costs, raising the financial performance of a pharma business is every senior executive’s wish. Improving the performance of products already in the market is a primary objective. This makes perfect sense. The value of an additional point of growth or margin from a typical pharmaceutical product is substantial, as are the health benefits of ensuring that patients are on the right medicines for the right amount of time. Pharmaceutical companies that want to outperform on this priority should add something else to their agenda: identifying and acting on “headroom,” which is the part of the market they don’t have, minus the part they will never get. The key to assessing headroom is understanding which customers have a high propensity for switching their behavior. The key to realizing headroom is knowing which tactics are most likely to result in the desired continued on page 33 ABOUT THE AUTHORS Greg Rotz is a partner and leads the North American Life Sciences sector at Booz & Company. Valentin Recker is a senior associate at the firm. http://www.ourcommunitycounts.org http://www.ourcommunitycounts.org http://www.drugchannelsinstitute.com/products/industry_report/pharmacy/ http://www.drugchannelsinstitute.com/products/industry_report/pharmacy/ http://www.PharmaceuticalCommerce.com

Table of Contents for the Digital Edition of Pharmaceutical Commerce - March/April 2013

Pharmaceutical Commerce - March/April 2013
Editorial
Contents
Op-Ed
Top News
Business/Finance
Brand Marketing & Communications
Supply Chain/Logistics
Information Technology
Manufacturing & Packaging
Legal & Regulatory
Meetings and Editorial Index

Pharmaceutical Commerce - March/April 2013

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